Accountable Care Organizations

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1 Accountable Care Organizations Randy Wexler, MD, MPH, FAAFP Associate Professor Vice Chair, Clinical Services Department of Family Medicine The Ohio State University Wexner Medical Center Objectives To understand rising health care costs. To understand how demographics impact health care costs. To understand drivers of health care costs. To become familiar with newer models of care delivery volume versus value based care. To understand Accountable Care Organizations. To understand new payment structures within an Accountable Care Organization 1

2 Contributors to Health Care Costs Demographics Public Sector Costs Private Sector Costs Physician Factors Administrative Factors Patient Factors/Satisfaction Rising Health Care Expenditures The US spends 17.3% of GDP on healthcare Medicare and Medicaid spending projected to exponentially increase CBO projects that 49% of GDP will be spent on healthcare by 2082 Projected Spending on Health Care as a Percentage of Gross Domestic Product. Congressional Budget Office Long- Term Outlook for Health Care Spending report, November 2007 (Figure 4, Page 13). CBO Web Site. Accessed January 31,

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5 Used with permission from the NICHM Foundation 5

6 Used with permission from the NICHM Foundation 6

7 Private Sector Costs General Motors: In 2007, cost of healthcare exceeds the cost of steel per car Starbucks: In 2005, cost of healthcare exceeds cost per coffee in each cup 7

8 Private Sector Costs American businesses are losing their ability to compete in the global marketplace. Health care at General Motors puts the company at a $5 billion disadvantage compared to Toyota The Cost of one test 1 extra test per day = 253 tests per year. $100 per test x $253 = $25,300 per year for ONE PHYSICIAN. There are 661,400 (Bureau of Labor Statistics, 2008) physicians in the US. 661,400 ordering 1 extra $100 test per day costs - $16,733,420,000 per year 8

9 Accountable Care Organizations Gail M. Grever, MD Assistant Professor of Internal Medicine Division of General Internal Medicine The Ohio State University Wexner Medical Center 9

10 Bottom Line: Current health care costs are not sustainable Health Care Reform: On 3/23/10, President Obama signed into law the Affordable Care Act Key Components: Volume Versus Value Based Care Accountable Care Organizations Shared Savings Patient Centered Medical Homes The Affordable Care Act Becomes Law. HealthCare.gov Website. (Accessed ) Volume versus Value Based Care Primary Care Payment currently depends on Volume Based Care Number of face to face visits Traditional fee-for-service model Meet productivity standards to maintain salary Hamster-Wheel Value Based Care is required for health care reform to succeed Incentive payments for quality reporting and performance, efficiency, and eventually value Value = delivery of good outcomes to patients at low cost (Encourages better health at lower cost) Instruments/QualityInitiativesGenInfo/Downloads/VBPRoadmap_OEA_1-16_508.pdf (Accessed ) 10

11 Healthcare is transitioning towards Population Health Management Traditional Patient Care vs. Population Health Focus on: Treatment of specific diseases and conditions Downstream symptoms of health programs Medical and biological determinants of sickness Patients Healthcare providers, purchasers and health plans Typically characterized by payment for volume Source: Health Policy Institute of Ohio, What is population health? Focus on: Wellness, prevention and health promotion Upstream causes of health problems and downstream symptom management Social determinants of health and community conditions All people or population segments Partnerships between health entutues and sections such as education, transportation and housing Typically characterized by payment for value i.e. higher quality at lower cost Transformation into Patient Centered Medical Homes 1. Access During Office Hours. 2. Use Data for Population Management 3. Care Management 4. Support Self-Care Process 5. Referral Tracking and Follow-Up 6. Implement Continuous Quality Improvement 11

12 Traditional Health Care Focus: Individual Patients Care Location: Offices IT: Minor Provider: Physicians Community Team Office Team Patients Physicians Office Hospital Courtesy of Lloyd Michener MD- Professor and Chair of Community and Family Medicine, Duke University Anywhere IT The Other Team Member: Heath Information Technology (HIT) 12

13 HIT Health Information Technology Electronic Medical Record Allows for communication between primary team Allows for coordination between primary team, specialists, hospital, home health Allows for communication between patient and primary team (Electronic Patient Portal Allows for better monitoring of medications and parameters of care for chronic diseases E-Prescribing Medical Home Version 1 Focus: Improved outcomes for patients seen in office Care Location: Offices and hospitals IT: Minimal Provider: Physicians and Office team Community Team Office Team Patients Physicians Office Hospital Courtesy of Lloyd Michener MD- Professor and Chair of Community and Family Medicine, Duke University Anywhere IT 13

14 Medical Home Version 2 Focus: Improved outcomes for patients seen across the spectrum of care Care Location: Offices and hospitals IT: Somewhat integrated Provider: Physicians, Office team, and Community team Community Team Office Team Patients Physicians Office Hospital Anywhere Courtesy of Lloyd Michener MD- Professor and Chair of Community and Family Medicine, Duke University IT Medical Home Version 3 Focus: Improved outcomes for all Care Location: Anywhere IT: Highly integrated Provider: Network Community Team Office Team Patients Physicians Office Hospital Anywhere Courtesy of Lloyd Michener MD- Professor and Chair of Community and Family Medicine, Duke University IT 14

15 PCMH is the Foundation of an ACO ACO and Patient-Centered Medical Homes: How One Organization Is Diving Into Both Models. Heather Punke. Becker s Hospital Review September 27, What is an Accountable Care Organization (ACO)? The Medicare Shared Savings Program (MSSP) was established by the Affordable Care Act. An ACO is the mechanism to participate in this program ACO refers to a legal entity composed of a group of providers that assume responsibility (are accountable) to manage and coordinate care for a defined group of patients in an effective (high quality) and efficient (low cost) manner. 15

16 ACO Facts (Medicare Model) It is a legal entity Comprised of hospitals, PCPs, specialty physicians, allied health providers, radiology, laboratory services Requires 5,000 Medicare beneficiaries Reimbursement based in Shared Savings Model (12) Members of ACO will share any savings realized with CMS If an ACO saves Medicare money, then a portion of the saved dollars goes back to the ACO and its providers Who can be an ACO? ACO professionals (i.e., physicians and certain non-physician practitioners) group practice arrangements; Networks of individual practices of ACO professionals; Partnerships or joint ventures arrangements between hospitals and ACO professionals; Hospitals employing ACO professionals; Certain critical access hospitals; Federally qualified health centers, and; Rural health clinics. 16

17 What are the Benefits of ACOs? Manages patient across all spectrums of care inpatient, outpatient, and ancillary Belief that change in health care delivery will lead to: (12) Better care for individuals Better health for populations Lower expenditures for Medicare Accountable Care Organizations An ACO is an integrated health care delivery structure comprised of various providers (primary care, specialty care, hospitals, ancillary providers, sub-acute nursing facilities, and others) that are accountable for the cost and quality of the care they deliver. Devers K, Berenson R. Can accountable care organizations improve the value of health careby solving the cost and quality quandaries? Robert Wood Johnson Urban Institute. October

18 How Care is Measured Source: Centers for Medicare & Medicaid Services Care Coordination Source: Agency for Healthcare Research and Quality 18

19 ACO Elements of Success AAFP has suggested 8 essential elements of an ACO Figure 1. The Eight Essential Elements of a Successful ACO. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P The ACO Guide: How to Identify and Implement the Essential Elements for Accountable Care Organizaiton Success. Source: North Carolina Academy of Family Physicians, Inc. Essential Elements A Culture of Teamwork Success of any ACO relies on moving away from silos of care Primary Care ACO s are focused on the whole patient. This includes prevention, chronic disease management, care coordination, and improved transitions across care. Health Information Technology and Data To adequately manage risk, focus on population health and provide timely and appropriate care, it is necessary to have access to EMR 19

20 Essential Elements Patient Engagement ACOs are patient centered, and require patients to be active and understand their care Scale-Sufficient Patient Population Requires patient population Best Practices Across the Continuum of Care Improved care coordination, reduced emergency department visits, reduced total hospitalizations, reduced re-admissions, and chronic disease management Essential Elements Adequate Administrative Capabilities Provide adequte administrative support performance analysis financial management clinical care Adequate Financial Incentives Appropriate financial incentives are part of success 20

21 Accountable Care Organizations Randy Wexler, MD, MPH, FAAFP Associate Professor Vice Chair, Clinical Services Department of Family Medicine The Ohio State University Wexner Medical Center Payment: CMS Medicare Models Medicare Shared Savings Programprogram that helps a Medicare fee-forservice program providers become an ACO. Apply Now. Advance Payment Model-supplementary incentive program for selected participants in the Shared Savings Program. Pioneer ACO -program designed for early adopters of coordinated care. No longer accepting applications. 21

22 Shared Savings Program CMS Definition: The Shared Savings Program ACOs are groups of doctors and other health care providers who voluntarily work together with Medicare to give high quality service to Medicare Fee-for-Service beneficiaries. An ACO is not a Medicare Advantage plan or an HMO. Shared Saving Program (CMS) Reimbursement based on fee for service PLUS a portion of dollars that Medicare saves due to value based care (decreased hospital readmission, decreased ED visits, preventive health) Promotes coordination among providers to: Improve quality of care Reduce unnecessary costs Designed to: Promote accountability (providers, hospitals, suppliers) Requires coordination of services Encourages investment in infrastructure and the redesign of care processes 22

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24 Payment Models Shared Savings-Health System has a target for expenditures. At the end of the year if they do not exceed that target, they receive a portion of the savings. Bundled Payments-a single fee is paid for a specific services (such as a heart catheterization) that covers all activity (physician, hospital, pharmacy, lab etc) related to that service. Through innovation if the cost is below that payment, additional revenues are realized. Episodic Payments-A single fee is paid for a specific service over time. For example, a hip replacement, or asthma care. Global Capitation-The health system received a PMPM based on number of patients contracted to provide any and all care needed by those patients. 24

25 Source: Kaufman, Hall & Associates, Inc.,

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